In this Fund update, Brent Miller, lead manager of MINN, shared his perspective on the Fund's first half performance, where the team is finding value across Minnesota, and why he remains confident in the portfolio's positioning as we move into the second half of 2026 and into 2027. This was recorded on July 22, 2026.
Executive Summary
MINN remains one of only two Minnesota municipal bond ETFs available in the marketplace. MINN is inteded to be a high-quality municipal bond fund focused, first and foremost, on income generation and the preservation of principal.
First Half Performance
Two intentional positions worked against relative results over the half:
First, movement in the municipal yield curve was a headwind as yields on the five-to-15-year part of the curve, where the Fund carries a higher concentration of bonds, rose the most. Second, the Fund's preference for higher-quality bonds weighed on relative performance, as several lower-quality categories, such as hospitals, saw yields fall while yields on AAA bonds mostly rose. Offsetting these, the Fund's security selection was a modest positive, and the Fund only slightly trailed its benchmark for the half.
Where We're Finding Value
- Outstate Minnesota. The Fund continues to find a healthy number of attractive investments in general obligation–backed projects outside the Twin Cities metro area. Greater Minnesota represents roughly 40% of the state's population and is home to many high-quality issuers. Traveling the state regularly gives the Fund manager firsthand confidence that Minnesota's small towns are in good shape. The team believes this on-the-ground perspective is a real advantage, one that comes from having a portfolio manager based in Minnesota, investing within the state.
- Minnesota higher education. While colleges and universities nationwide face pressures around finances and student enrollment, the Fund benefits from a thriving roster of institutions in Minnesota, including four higher-education holdings in the Fund.
Looking Ahead
Credit within the Fund is in a good place. The Fund manager is comfortable with portfolio positioning, as approximately 84% of the portfolio is rated AA or higher. The broader market, however, feels fairly detached from underlying fundamentals. The team doesn't hope for downturns, but does plan for them knowing they will come at some point, and aims to build a portfolio that can hold up when they do.
Finally, the Fund manager believes in Minnesota's long-term capacity for growth. As the Land of 10,000 Lakes, Minnesota holds a structural advantage that matters when you own bonds out to 20 years, which include the ability of people to stay in place and grow their jobs, families, and education. By contrast, water-constrained regions across the country are confronting serious capacity constraints and curtailing growth as a result, with meaningful long-term implications for credit quality. Minnesota simply shouldn't face those pressures, and the Fund manager believes that leaves the state exceptionally well positioned over the next several years.
Click here for a complete list of MINN holdings.
Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates.
Basis point is a unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001.
Performance data as of 6/30/2026.
Expense ratio 0.25%.
The statements and opinions expressed are those of the speakers and are as of the date of this call. All information is historical and not indicative of future results and subject to change.
Pete Slattery is a registered representative of Foreside Fund Services, LLC.